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Wheat Market - Just My Opinion

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On Tuesday US wheat futures resumed being the favorite short within the grain complex. This held true not only for the flat price but as well for inter-market spreads. The lack of export continues to be the stumbling block here. Sure Gulf prices read high but thats due to a lack of movement as elevators would rather collect storage income vs. moving the wheat. A sloppy looking technical picture added to the days weak performance. So far the developing drought conditions in the Southern US Plains are failing to attract any attention.

Not much change is being noted within the interior cash wheat markets. Basis levels can be called steady to better. Locations closest the Gulf appear to show the best basis levels but that is in part to lower transportation costs. The Gulf for HRW continues to strengthen while SRW at the Gulf appears dead in the water. Chgo spreads, March forward, ran steady to fractionally easier while KC March forward spreads ran steady to fractionally better.

Prior to Tuesday the price action in the flat price wheat charts were beginning to show anupflagging formation. After Tuesdays action those perceived upflags are breaking down. Despite the ugly looking flat price action the support that was established after last weeks upside reversals continues to hold. For those of you that are trying to be friendly you probably dont want to see March Chgo wheat below $4.30 to $4.28 and March KC below $4.28 to $4.26.

Daily Support & Resistance for 12/06

March Chgo Wheat: $4.28 - $4.40

March KC Wheat: $4.28 - $4.40

Trading Futures is Risky - Be careful of what you're willing to risk

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About the author

Tom Fritz is a third generation commodity futures trader. His grandfather and his father were traders on the exchange. Tom began his career in 1971 with Tabor Grain which was later acquired by Archer Daniels Midland. Prior to co-founding IFG in 1994 Tom was the lead Chicago Board of Trade floor analyst for ADM. He produces Just My Opinion, a daily grain commentary that is well respected and viewed all over the world.



Contributing author since 11/7/2017 

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